P A G E
Friday, March 5, 1999
today's calendar
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E D I T O R I A L P A G E |
Friday, March 5, 1999 |
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spotlight today's calendar |
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Grow
and suffer
BADAL,
TOHRA & DALER MEHNDIS
“Corporation
Nation” |
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China
— economic Goliath
The
third year syndrome
The
value and purpose of scouting |
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Grow and suffer THERE is no end to the predicament of the Indian farmer. If he escapes the vagaries of the weather, he suffers for some other reason. Perhaps, suffering is there in his fate, whatever the situation! How else should one describe his helplessness when his back is broken even for producing more? There is a bumper crop of potato, tomato, cauliflower, cabbage, carrot, radish, etc, in Punjab. The kisans should feel being on top of the world, but they do not. They are in great trouble. Cauliflower growers are losing Rs 3000 per acre. They are preferring to destroy the crop in the field itself to minimise their loss. What a pitiable situation, indeed! Tomato and potato, along with onion, brought about the downfall of the BJP government in Delhi and Rajasthan only a few months back because of their scarce availability. Now these commodities are available in abundance because of the untiring efforts of farmers. But the producers are getting ruined. There is no system to take care of their interests. The farmers in many cases are not finding willing buyers even at less than the cost of production of their vegetables. Can we expect them to take trouble to produce so much of vegetables next time? And if there is an acute shortage, as it was last year-end, who will be to blame? No one would be able to utter even a single word against the kisans. The extraordinary glut in
the vegetable market in the region has been caused mainly
because of three factors, as it appears from the reports
available. One, the Delhi mandis are flooded with
vegetables from western UP owing to better transportation
and other facilities, and hence little demand for the
produce from this region. Two, a change for the better in
the climatic conditions led to the early ripening of some
of the crops, disturbing the natural balance in the
arrivals. Three, in the absence of any mechanism to warn
the growers of the impending danger, they began their
harvesting operations quickly, as in Punjab most farmers
need their fields for growing sunflower, a cash crop. Of
course, there is a sharp fall in the vegetable prices
during this season every year, but the situation that
prevails today is not normal. It could have been avoided
by guiding the growers — how to go about in these
circumstances. The states have their own agricultural
universities which should function as true friends of
farmers. This is possible when these institutions start
educating the agriculturists about what to grow, when to
grow, when to harvest and how to market their produce,
besides helping them in deciding which seed to use to get
a good crop. Otherwise, who will want a good crop if it
brings one’s ruin? The government can come to the
rescue of the vegetable growers in two ways. It can
introduce a minimum support price system in the case of
these early perishable commodities. The government should
create an agency to help the farmers in marketing their
produce. It should not be forgotten that there is a big
and fast-expanding export market for processed
vegetables. In fact, the state governments should ask
their respective universities to warn the farmers of glut
in the market as they do in the case of an emerging
disease threat. This is not a tall order. Punjab should
give the lead in the matter as the farmers here are the
major losers today. This is in the interest of the
government too. In this state the crushing decline in the
vegetable prices can be the cause for a change of the
government as it happened in at least Delhi and Rajasthan
last November because of the sharp rise in the price
curve. |
In Bhandari’s Bihar IT is a pity that the daily doom, by which Bihar has been reduced to a bankrupt and demoralised state during Mr Laloo Prasad Yadav's direct as well as proxy rule, is continuing even after the imposition of President's rule. Jehanabad is just one of the numerous unfortunate places where goons and goondas hold sway. There is a queer state of decimation in the heart of the state. Total anarchy has been prevailing in Bhojpur and Magadh areas for several years. Members of the People's War Group (PWG), also called Naxalites, are taking a heavy toll of life in the rural areas of major districts like Muzaffarpur, Champaran, Sitamarhi and Bhagalpur. The distinction between the masses and the classes is brought into occasional discussion plainly for rhetorical purposes. The war there is between goondas and goondas. The Ranvir Sena has the patronage of the dwindling "high-caste" people whose survival remains threatened. The PWG is no revolutionary force. It indulges in provocative and vengeful crime. Look at the most recent calendar of events: February 10— eleven Dalits are killed by Ranvir Sena men in a village near Jehanabad. February 14—there is a massacre in another nearby village. March 2 — heavily armed brutes of the PWG raid Bhimpura under the Makhdumpur police station. They take away four Ranvir Sena activists by force to a nearby field and shoot them. Bhimpura is less than 2 km away from Narayanpura where 11 Dalits were slaughtered by Ranvir Sena men. The slain included innocent women and children. The brutal murder of seven members of an upper-caste clan at Usri Bazar in the same stretch had taken place barely a fortnight ago. The Ranvir Sena and the
ultra-Left extremist groups have not been fighting for
any revolutionary cause. They have been employing
terrorist tactics to establish their supremacy in the
area. Governor Sunder Singh Bhandari — his RSS
convictions notwithstanding —wields enormous power.
He is the President's agent and the de facto ruler of the
state. The validity of anything done by him cannot be
called into question on the ground that he ought or ought
not to have acted in his discretion. The administration
is directly controlled by him and it is his business to
provide full protection to all sections of the community
by taking the advice and assistance of the Union Home
Minister. Why is Mr Bhandari showing helplessness in the
wake of the recent killings? The Rashtriya Janata Dal
President, whose wife has been dethroned, is talking in a
belligerent manner and the supporters of President's rule
are wondering if the latest killings were actually
engineered by Mr Laloo Prasad Yadav to defame the Central
Government and the Governor. The President's
administration has great possibilities. The entire area
can be declared as "disturbed". Not long ago,
we suggested in these columns that the corrupt police of
Bihar should be put under the supervision of upright
officers drawn from the paramilitary forces, and then
completely overhauled. No step in this direction has been
taken. It should be nobody's case to turn Bihar into
another Jammu and Kashmir in the matter of security. But
a terrorist-ridden Punjab-like dispensation is certainly
called for. The Leftists as well as the rich landlords
should be disarmed and all trouble spots should be
brought under a ruthless administration. Biharis are not
for killing, nor is Bihar a future Kurukshetra. The buck
has stopped at the door of Mr Bhandari and, therefore, at
that of President K. R. Narayanan. It is not impossible
to govern Bihar. The average citizen there is famished.
He needs food. In the northern part, the chief source of
sustenance is agriculture while in the southern belt,
precious minerals are available in plenty. If the rule of
law is established without the politicisation of the
administration and the police under President's rule, a
vast population of insecure men and women can be
reassured of their fundamental rights to life and
property. If Bihar is saved, a positive message can go to
nearby Orissa and West Bengal also where the situation is
deteriorating with every passing day. |
|
SHARE prices rocketed across the country fuelled by the intangible post-budget “feel-good” factor and the very real interest rate reduction by the RBI. The Sensex soared by 406 points in three days, setting a record of sorts in recent years. This showed the inherent strength of the market that the bull factor is very much present and bear pressure can be reversed. Unfortunately, it was a short-lived phenomenon. On Wednesday itself, some counters witnessed hectic selling, and as it often happens on the herd-mentality driven trading floor, prices began to sag and the index fell sharply by 50 points. Mostly computer software and pharmaceuticals shares lost and it is easy to see why. In the first two days, they led the price rise and one share gained as much as Rs 700 a share, yes, Rs 700 a share, and holders found it irresistible to make a fast buck. This is the gambler’s attitude and has been the bane of Indian stock market. This time though, it may be different. In the first place, all leading shares uniformly gained, not those of just one or two industries as in the past. Two, even B and B1 group scrips, which were selling at a price below their face value, found buyers and regained part of their appeal. A good number of retail traders in shares joined the game indicating that it is not the big boys alone who mattered. One analyst feels that foreign fund managers and giant Indian investors like UTI are buying. Even if two of these four factors remain active, the market will remain buoyant and with some luck, may start a claw-back to a Sensex of 4000-plus points. That is a safe threshold and will reset the matrix of the market. There is a related helpful
aspect. Budget analysis is still at an early stage. There
are several measures whose impact is yet to be fully
assessed and experts are busy poring over the details and
calculating how these will affect their clients. For
instance, Finance Minister Yashwant Sinha claimed on
Wednesday that the value of all his tax concessions works
out to over Rs 8000 crore. It is a big amount, and if
focused on select sectors of key importance, can have a
cascading effect. This is what is happening to bank
shares. The RBI decision to cut the bank rate and release
more money for lending sparked, what market men call, a
brisk rally. Scrips which were abandoned rose smartly,
establishing a direct relationship between policy changes
and investor preference. Mr Sinha must be hoping that the
slight set-back to the stock market revival on Thursday
is temporary and there is much stamina left in the
original euphoria. |
BADAL, TOHRA & DALER MEHNDIS
WHITHER Punjab? Is the revival of militancy on the cards? Will the ruling SAD split into two factions? I have been flooded with such questions from a large number of people in the region and beyond, especially from those who understand the value of peace in Punjab. The questions are not simple and therefore not easy to answer. As in other facets of national life, in Punjab too there are wheels within wheels and we can never be sure which wheel is operating for whose benefit and for what purpose. Complexities are part of the Indian character and its socio-political milieu. That is why even simple issues either look complicated or are made complex since Indians tend to work at cross-purposes even in simple routine matters. Politicians have their own angles and angularities and they invariably promote their personal and sectarian interests all the while. The ego only complicates problems. The current crisis in Punjab is, in a way, an offshoot of the ego clash between Chief Minister Parkash Singh Badal and SGPC President Gurcharan Singh Tohra. Of the two, it can be safely said that Mr Badal is definitely the people's leader. He is the tallest of all leaders in the state. It is a different matter that some erosion has taken place in his popularity in recent months because of his running feud with Mr Tohra and Bhai Ranjit Singh. This erosion could be due to the inability of the Chief Minister to come to grips with the psyche of rural Sikhs. They have their own way of looking at the Tohra-Badal tussle which has had a fallout on gurdwara politics, Akal Takht included. True, Mr Tohra is a crafty politician. He has dominated the state's gurdwara politics for nearly three decades. In fact, he has kept himself afloat politically because of his ability to use the instruments of gurdwara power structure to his advantage. The current tug of war between him and Mr Badal has also exposed him and has eroded his gurdwara base. But, then, the SGPC chief knows the art of survival. Indeed, Mr Tohra may be down right now but one should never underestimate his capacity to bounce back. A master craftsman in the politics of religion, he never lets go an opportunity to manipulate friends and adversaries. His reflexes are sharp. He knows how, where and when to strike and not to strike in the crude game of playing the religious card for political purposes. The Chief Minister's forte is his image as a gentleman and moderate politician. He derives his strength from the Hindus and the Sikhs alike. He is actually seen as a solid bridge between the two communities even at the worst of times. This is not a small thing in Punjab which had seen the bloody days of militancy in the eighties. The question often thrown up is why Mr Badal should be under pressure right now despite popular goodwill and the advantages he derives as a mass leader. The answer to this question is very simple. Notwithstanding his stature, Mr Badal has not been able to have a firm grip on the administration. In fact, he ought to have derived his strength by governing the state decisively and effectively. Instead, we see his grip loosening as his attention is divided in countering the onslaught by Mr Tohra and his associates. Besides, his desire for a bigger role in the Khalsa tercentenary celebrations starting from April 13 at Anandpur Sahib has kept him busy. His wrong choice of bureaucrats in key administrative positions has only made matters worse for him. It must be said that the people of Punjab have been expecting miracles from Mr Badal. They have been wanting the Chief Minister to put the state on a fast track of development. But that would have demanded a Partap Singh Kairon-like iron grip and total determination to make things move fast in the desired direction. Divided attention, however, can only give divided results. This is the tragedy of Mr Badal, whether he admits it or not. The slidedown has been obvious for quite some time. Of course, some of the industrial and economic ills of Punjab and the region as a whole are part of the national scene. But there is no reason why Mr Badal could not have made a difference in running the state as Mr Chandrababu Naidu of Andhra Pradesh could. In fact, it is the below-expectation performance of Mr Badal which makes him vulnerable today and he should have reasons to feel worried on this count. The sooner he applies correctives to reverse the drift, the better will it be for his success in outmanoeuvring his political opponents. The Chief Minister ought to understand that the ultimate test of his success lies in his performance. Only credible performance as Chief Minister can make him one up on Mr Tohra. True, the Badal-Tohra feud has created a climate of uncertainty in Punjab today. But this should not be seen as a signal for the return of militancy in the state. "There will be no revival of militancy in Punjab. I will never be a party to anything that creates an atmosphere of terrorism. This will not be good for Punjab and India as a whole. I will be the first person to face the bullet to oppose such forces," Mr Tohra told me recently in the course of a long informal conversation. Some old-timers, however, remind me that even in the early eighties Mr Tohra had made such pronouncements. Perhaps, this is all part of competitive Akali politics. The Akalis are never able to sustain the majority game in an election. Nor can they retain the goodwill of the people. This has been the trend of Akali politics in the past, and the present does not seem to be an exception to this general rule. All the same, Mr Tohra's categorical declaration against the revival of militancy does underline a healthy competition in moderation, though the SGPC chief's "bloodshed" call during the Hola Mohalla celebrations at Anandpur Sahib on Tuesday is very disturbing, to say the least. Whatever might be the nature of the Akali infighting, I can say with confidence that militancy is not on a comeback trail in Punjab for the present. . The reason for this positive thinking is the memory of the common people in Punjab which is still fresh with the wounds inflicted during the days of terrorism. They have not forgotten the evil phase of life in the state, nor have they forgiven those who added fuel to the fire. The Sikh peasantry is known for its rugged commonsense. I have always felt that more than Mr K.P.S. Gill and others, it was the people's revolt against the trigger-happy and demanding militant groups that turned Punjab against terrorism. The villagers are still full of innumerable tales of how they and their womenfolk suffered in the crossfire between terrorists and the police. And they definitely do not want a return to those gory days. Much, however, will depend on how the leaders in the state conduct themselves in the critical days ahead. In fact, the onus lies on them to take the state forward on the road to economic growth. Punjab needs an all-round revolution in education, employment generation, social uplift and infrastructural development. Once the Badal government addresses itself to these tasks honestly and with determination, things will surely look up. Populist postures alone cannot deliver the goods, nor can rhetoric transform community life. Punjab needs a new and powerful stimulus of socio-economic revolution. The old order has to change. The new order has to be oriented towards the youth. There are positive straws in the wind. It speaks volumes for the resilience of the people of Punjab that in place of the fury of bullets, we have these days the sounds of Daler Mehndi, Gurdas Mann, Hans Raj Hans, etc. We have the heart-throbbing songs of such artistes as are on the lips of every youthful Punjabi and also the non-Punjabis in the rest of the country. Unfortunately, on the
social, political and economic fronts, Punjab has not
been able to get rid of a mindset which tends to take it
backward instead of allowing it to move fast on a 21st
century road. Punjab needs a political Daler Mehndi to
cast a spell on the youth and the old alike and motivate
the state to the new task of growth and advancement. |
“Corporation Nation” EXXON merges with Mobil. Citicorp marries Travelers. Daimler Benz gobbles up Chrysler. BankAmerica takes over Nations Bank. WorldCom eats MCI. Corporations are getting bigger and bigger, and their influence over our lives continues to grow. America is in an era of corporate ascendancy, the likes of which we haven’t seen since the Gilded Age. Charles Derber, a professor of sociology at Boston College, believes that, contrary to the lessons our civics teacher taught us, it is undemocratic corporations, not governments, that are dominating and controlling society. In his most recent book, “Corporation Nation”, Derber argues that the consequence of the growing power of giant corporate multinationals is increased disparity in wealth, rampant downsizing and million-dollar CEOs making billion-dollar decisions with little regard for the average American. A couple of years ago, Derber wrote “The Wilding of America” (St. Martin’s Press, 1996) in which he argued that the American Dream had transmuted into a semi-criminal, semi-violent virus that is afflicting large parts of the elites of the country. That book tried to call attention to the extent to which violent behaviour could be understood as a product of over-socialisation. “The problem was not that they had been underexposed to American values, but that they could not buffer themselves from those values”. Derber told us; “They had lost the ability to constrain any kind of anti-social behaviour — because of obsessions with success — the American Dream.” By anti-social behaviour, Derber means the epitome of Reaganism — “a kind of warping of the more healthy forms of individualism in our culture into a hyperindividualism in which people asserted their own interests without regard to its impact on others”. At the time, Derber was interviewed on a Geraldo show about paid assassins — people who killed for money. “It was scary to be around young people who confessed to killing for relatively small amounts of money — a few thousands dollars”, Derber said. “They said things like — “you have to understand, this is just a business, everybody has to make money.” This was the language that business usually uses. At the same time, Newsweek ran a cover story titled “Corporate Killers”. On the cover, Newsweek ran the mug shots of four CEOs who had downsized in profitable periods and upped their own salaries. These corporate executives tended to use the same language as the paid assassins on the Geraldo show, “I feel fine about this because I’m just doing what the market requires,” Derber explains. “I develop an analogy between paid assassins on the street and those in the suites. In the most generals sense, these corporate executives are paid hitmen who use very much the same language and rationalisation. I argue that corporations are exemplifying a form of anti-social behaviour which is undermining a great deal of the social fabric and civilised values that we would hope to sustain.” With the hitmen parallel fresh in his mind, Derber began writing “Corporation Nation”. In it, he points to the parallels between today and the age of the robber barons 100 years ago — the wave of corporate mergers, the widening gulf between the rich and the poor (Bill Gates’ net worth — well over $ 50 billion — is more than that of the bottom 100 million Americans), the enormous influence of corporations over democratic institutions, both major parties bought off by big business, and a Democratic President closely aligned with big business (Grover Cleveland then, Bill Clinton today). One big difference between then and now: back then, a real grassroots populist movement rose up to challenge corporate power, though it did not succeed in attaining its core goals. Today, while there are many isolated movements challenging individual corporate crimes, there is no mass movement attacking the corporation as the cause of the wealth disparity, destruction of the environment, and all the many other corporate-driven ills afflicting society. Derber says that when he asks his students, “Have you ever thought about the question of whether corporations in general have too much power?,” they uniformly say they have never had that question raised. According to Derber, one good way to again build a populist movement to attack corporate power is to study the language and tactics of the populists of 100 years ago. He has, and he makes clear in his book that the original concept of the corporation was one of public — not private — entity. We the people created the corporation to build roads, and bridges, and deliver the goods. If the corporation didn’t do as we said, we yanked their charter. — TWNF The corporate lawyers quickly got their hands around that idea, smashed it, and replaced it with the current concept of the corporation, a private person under the law,with the rights and privileges of any other living and breathing citizen. Thus, a quick transformation from “we decide” to “they decide”. Derber is a bit too modest
to say this, so we will: perhaps the best way to rebuild
a strong, vibrant and populist movement is to get this
book into the hands of people who care about democracy.
The corporations have us on the run, but we should pause
for a moment or two, find a quiet place, and read this
book. — TWNF |
The
third year syndrome MY wife had undergone an operation for Neurofibroma recently in the local Indira Gandhi Medical College. She was convalescing in her Ward. I took time to go for a cup of tea in the hospital canteen. The table adjacent to that of mine was soon occupied by the would-be medicos studying in the college. One of them wanted to have a Chinese preparation. The other said: “Beware of the Chinese Restaurant Syndrome.” I was curious to know what it actually meant so, despite bad manners, I hung my ears towards them. I could add to my knowledge that the syndrome meant temporary arterial dilatation due to absorption of monosodium glutamate, which was used liberally in seasoning Chinese food. It could result in throbbing head, tightness of jaw, neck etc and also backache. “Is it real or have you coined it just like that”, I intruded. “It is a medically recognised syndrome, uncle. Have you heard of any other syndrome?”, one of them said. “Yes, the most known one — acquired immunodeficiency syndrome (AIDS)”, I replied. “That is the first one in our syllabus. There are 212 syndromes in all, alphabetically the last one is Zollinger-Ellison”, it was the turn of the only female member of the group. I had no mood to know the details of that one and so changed the topic. I confessed that whenever I read Family Medical Adviser, I started feeling that I had all the symptoms of the disease that I was looking for in the book. I wondered whether the students studying various diseases in the classrooms also felt the same. “Yes, we do. We call it the third year syndrome, the year from which we start paying special attention to diseases falling in the departments of our choice. Say, one who joins ENT starts feeling that he suffers from all the diseases of ear, nose and throat”, one of them said confidently. The lady member was quick to retort, “Do not tell me that you also suffer from that syndrome with Gynaecology as the department of your choice?” Amidst a guffaw, I said, “It must be the 213th syndrome.” “And out of our
syllabus”, the words floated in unison. |
China —
economic Goliath
of 21st century ECONOMIC warfare was first started by the USA against Russia. Now China has resorted to it against India without much fanfare. Pakistan is also slowly learning the art. Its agenda to sell 300 MW of power to India is on a higher pedestal than the J&K issue. The beauty of economic warfare is that initially it is not easily visible but perceptible at a later stage. America’s warfare has been complete and Russia is still licking its economic wounds. China has started the operation with low acceleration. China is a unique country and maintains total dissimilarity with other nations of the world in governance and foreign policy. It is a self-made country and remained totally isolated from the world almost for four decades. It is the only underdeveloped country which never went to World Bank or IMF for financial assistance. The basics of its foreign policy are never understood. After the 1950 revolution, its first priority was to arm itself fully though there was no fear of any attack or invasion by any of the neighbouring countries because of its unique geographical position. There is complete internal democracy in the party hierarchy though the form of government is not democratic. All the demerits in democratic governments of the Asian countries are its strong merits. For example, the government does not have to spend six months a year in parliamentary debates or look towards the mood of its allies to take hard decisions. According to China watchers, “China strongly believes that a country will not command self-respect in the world till it is strong both militarily and economically.” It has achieved the first objective and is seriously engaged in the second. As all of us know, China is the largest country in the world with 1200 million consumers. With the advancement in farm technology, it has been possible for her to feed 1200 million people without importing foodgrains, If there is a famine, then it allows its people to starve rather than import foodgrains. But to give them employment is certainly a challenging task. This problem can be overcome only through massive industrialisation. Therefore, the government’s entire thrust is now on to implement only one point programme i.e. to maintain 8 per cent growth rate and keep its factories running in three shifts round the year. A growth rate of 8 p.c. is probably the highest in the world. But for China, to maintain a 8 p.c. growth rate is not so difficult as to absorb the finished products in domestic and the world market. The exports are also indispensable to maintain a trade surplus and offset imports. Pumped by massive state spending on highways, telecommunications and waterworks, China’s economy grew by 7.8 p.c. during 1998-99. Several economists say that figures appear to be too good to be true considering Asia’s worst slump in the market after World War II but Chinese leaders stand by these figures. This startling growth puts China ahead of every major Asian economy. China made a trade surplus of $ 45 billion in 1998-99 against $ 40.3 billion in 1997-98. The exports were $ 182.7 in 1998 compared to $ 182.7 in 1997 and imports were $ 137 billion. The GDP was $ 960.8 billion. The direct foreign investment in 1997-98 was $ 45 billion against India’s $ 4 billion but it is going to recede this year because of bad loans by Chinese banks; a problem which crippled the Japanese economy as well. China is very lucky to have India as its neighbour. India, too, is a country of 970 million consumers. The agricultural yield by and large is at its peak. Farmers sell their produce and earn hard cash in the months of May and November. They then use their cash in purchasing finished products from the industries. Owing to the incidence of disease, per capita consumption of medicine is also high and the pharmaceutical industry is always booming. China somehow has come to know the demand pattern of Indian consumers very thoroughly. Therefore, it has devised many strategies to sell its products in India on a massive scale. The low import duties came very handy. Here are a few examples. Electric meters from China are much cheaper than the ones manufactured in India and many state electricity boards (SEBs) are purchasing Chinese meters only. A manufacturer of Paracetamol said the production cost of his product was Rs 146 per kg, whereas the Chinese product is available at Rs 120 per kg in Calcutta. The large amount of excise duty is another reason for non-competitiveness of Indian products against Chinese. Recently the Union Government had to increase the import duty on sugar to make indigenous sugar compete with imported sugar from Pakistan. In fact, the Pakistan Government subsidised the cost of sugar to allow its traders to export it to India at cheaper rates. The government cannot increase the duty on every product after signing the Dunkel Draft in 1993. A Korean unit near Rewari is incurring a loss of Rs 1 crore per month because of poor sales of copper wire. The reason is coincidentally the same i.e. copper sold by China is much cheaper. Gedore tools are also losing the market for the same reason. The recession in the steel industry, existing partly due to availability of cheap steel from China, has taken a toll on the sponge iron industry as well. Three sponge iron units — Goldstar Steel and Alloys Ltd., Kumar Metallurgical Corporation and Tamil Nadu Sponge Ltd have already downed their shutters. Another three units — Nova Iron and Steel Company, Bihar Sponge Iron and Prakash Industries Ltd. — have been referred to the BIFR. If recessionary trends continue, there is a chance of more units becoming unviable. Making matter worse is the fact that in the user industry, induction and electric arc furnaces, are doing badly. The sponge iron industry faced an additional problem — the excise duty on sponge iron was 15 per cent, but the finished products made from the induction furnaces had a compound levy and did not enjoy Modvat benefits. This is how the industrial environment is faced with complex problems and problems for India are opportunities for China. Likewise, Rs 4500 crore soda ash industry has come under tremendous pressure due to cheap imports from China. The companies that have been affected are Tata Chemicals, Saurashtra Chemicals, DCW, TACT, Gujarat Heavy Chemicals Ltd., Birla VXL Ltd. and Punjab National Fertilisers & Chemicals. These companies have alleged that Chinese exporters are dumping the commodity on India at $ 120 per tonne while the price in the Chinese market is around $ 180 per tonne. As a result, the import of this commodity has increased from 17,152 tonnes in 1995-96 to 1,17,413 tonnes in 1997-98. The domestic industry has, therefore, demanded an increase in the customs duty on soda ash, which was earlier reduced from 65 p.c. to 30 p.c. The Chinese exporters have shown great cleverness by dropping the price to as low as $ 110 per tonne in 1998 as against $ 143 per tonne last year by subsidising the exports and increasing the corresponding price in domestic market, which consumes 80 p.c. of the production. In this way there is a long list of consumable items which China has been able to sell in India without making its presence felt. The Chinese do not come to India to sell their products. It is the Indian traders who go to China and Hong Kong to make the deals and sell their products in India to earn huge profits. Take the case of Paracetamol again: an Indian trader purchases the same product at Rs 120 per kg after paying the import duty and sells it in India at Rs 135 per kg against the domestic price of Rs 146. So a profit of Rs 15 per kg is quite substantial. In this way, Indian traders vie with each other to sell cheaper Chinese products more and more in India. The net effect is that Indian manufacturers lose both domestic and world markets. China is able to manufacture products at relatively cheaper price because availability of cheap labour (in many public sector units the Chinese Government employs its prisoners to bring down the cost); cheap electricity; and low over-head charges. In India the situation is totally reverse. For example, the electricity is very cheap in Kerala i.e. Rs 1.22 per unit, but no industrialist tries his hand in that state simply because of militant labour conditions. In a nutshell, Indian industry is facing recession partly because an Indian manufacturer cannot produce goods to compete with Chinese and Korean prices and is losing both domestic and export markets. The Chinese products have swamped Indian markets and the tide is rising with greater surge in future till the Union Government takes some measures to reverse the trend. The fact that Chinese
economy is not going to boom this year because of
large-scale liquidation of banks; and foreign debt
serving problems is no consolation for India. China finds
the easiest entry of its manufactured goods in the Indian
market because of disorganised trading and marketing
conditions. Intrusion of Chinese goods into Indian
markets in a well-organised system is no less than an
economic warfare, I believe. |
Durban to
Davos
— march back to slavery IN 50 years, we in Asia and Africa have lost what it took a hundred years or more to gain — our freedom. We have lost our economic freedom. We are losing our political freedom. And we do not seem to have retained even our intellectual freedom. Do we resist? Hardly. At Durban, the nonaligned were as divided as ever before. At Jamaica, it was pathetic to see the G-15 still tied to the apron strings of the former colonial masters. And at Davos, we discovered how we were frogmarched into globalisation, when we knew almost nothing of what was in store. The developing countries do not inspire confidence. They have a bad record. In the early 70s, billions of Petro-dollars were transferred from the poor countries to the rich nations through the price mechanism. Some of the OPEC countries played a key role in it. They were, alas, the developing countries! With a surfeit of petro-dollars, the Western banks were able to lure the developing countries into the debt trap. And, strange to say, the developing countries even legitimised the nuclear weapons by giving an extension to the NPT! They also signed the CTBT. And when India sought the non-permanent seat of the Security Council, it received just 40 votes! The rest went to Japan, a country which has a poor record of support to Third World causes, but has plenty of credits to offer. We cannot but draw gloomy lessons from these. Disarmament, development, decolonisation and apartheid — these were the subjects that dominated the north-south discourse before. Then the north was on the defensive. Today the discourse has been changed to environment, human rights and good governance. The developing countries are now on the defensive. Globalisation is the new mantra. It was supposed to bring prosperity. Actually, it was a ploy to establish corporate colonialism. But it was never thought through fully. It was blindly imposed. The consequences are disastrous. There is no great enthusiasm for globalisation even in Europe. Germany’s Social Democratic Party says: “We can’t allow globalisation to lead to an unreasonable erosion of the social security system”. This is the stand of almost all European countries. But that made no difference to Wall Street. Everywhere the nation states are facing a crisis of identity. (This is true of America, too). Trading blocs have become more relevant than old nation states. As Peter Drucker says, the nation state is no longer “the predominant unit of economic life”. But, for all the talk about humanity’s “common fate”, the global village remains deeply divided along economic, cultural and political lines. At Durban, India, the pioneer of nonalignment and champion of many Third World causes, found itself on the defensive. By bringing up the subjects of Pokhran and Kashmir, almost be censure India, President Nelson Mandela destroyed the Durban summit. It was a spanner in the works. Durban was aborted. A great deal was expected from Mandela to give shape and life to the nonaligned movement. But, instead of articulating the hopes and anxieties of the nonaligned, he chose to speak for the USA! One expected Durban to set the new agenda for NAM, now that the bipolar world of the cold war days has come to an end. India had plans to articulate the new ideas, but after what Mandela did, India lost its heart for the job. We expected some initiative on regional security arrangements without involving the hegemonic powers. Such a regional body could have dealt with insurgency, terrorism, ethnic revolts, and so on. But there was no initiative. On the economic side, NAM should have taken a major initiative for a new international financial system in the wake of the East Asia crisis. Although the free flow of capital is now identified as the villain, nothing was said of the need to control capital flows! In fact, Mandela is known to support the World Bank and IMF prescriptions, which have devastated the developing world! At Jamaica, one expected a measure of unity among the G-15. But there was none. “We (G-15) are a divided house,” said Shekhar Datta, who led the Indian business delegation to Jamaica. And there was little “common” in their beliefs. “We are linked with each other only by thin and friable beliefs”, said Malaysian Prime Minister Mahathir Mohammed. Although the G-15 have the power to influence the G-7 (the annual trade turnover of G-15 with G-7 countries is 500 billion dollars), they have not even attempted to do so. More so because 80 per cent of their exports go to G-7 countries. The turnover of G-15 among themselves is no more than $ 56 billion! “Coming to Jamaica was a waste of time”, bemoaned Datta. But the steady decline in world trade and commodity prices has woken up the G-15 to the perils of their situation. If we want to safeguard our future, we have to be aware of the forces around us, to consult with each other more often and to have a common stand on most issues”, warned the Malaysian Prime Minister. A common stand was taken on speculative activities at the instance of India. The joint communique said concrete steps should be taken to develop “mechanisms and adequate rules to monitor and supervise the operations of larger financial players, including hedge funds and currency speculators”. These were necessary as an early warning system. But there is little follow-up! And the communique urged the inclusion of social safety net as an integral part of development policies and programmes at both macro and micro levels. “If the G-15 leaders are serious about dealing with the adverse consequences of globalisation, they will have to be more aggressive in first defining their own national interests and then sticking to them”, Mahathir Mohammed said. At the Davos meeting, there was nothing to crow about this year. In fact, Claude Smadja, Managing Director of the World Economic Forum, admitted that globalisation has run into systemic troubles “brutally exposing vulnerabilities and explosive structural weaknesses in the international financial system”. According to him, “the financial crisis has exposed to what degree massive shifts in short-term capital flows and unmonitored activities of hedge funds could become a time bomb for the global economy”. Were we aware of these time bombs ticking away? We were not. Nor were the World Bank and IMF. But there were no dearth of “eminent” people in India to advocate a plunge in the dark! Our enemies are within. Al Gore, US Vice President, and Robert Rubin, Treasury Secretary, however, continued to insist that we all take to “free trade” and let capital flow freely. But free trade has run S.E. Asian economies to the ground! And why should we practise “free trade” when the USA is taking to all sorts of protectionism? As for speculators, they played a key role in both Mexico and East Asia. Yet they are being protected. “Any country which says it cannot control its banks and its banking system”, cried Mahathir Mohammed, “is not fit to be a government; it should either resign or be overthrown”. If this is not being done, there is a reason for it. In the West, the individual can do just about anything he wants in the economic field because that is his right. But we in Asia have no right to hurt the community. We have a different value system. Numbers do not make for
strength. Yes, it did during the cold war days. But no
more. What makes for strength is unity. It is time to
rethink the rationale of NAM and of our economic
struggle. |
The value and purpose of scouting THE other day, Pandit Ramchandra Sharma, Organising Commissioner, Seva Samiti Boy Scouts Association, delivered two lectures in Victoria School and E.I.M. High School at Bareilly in the morning on the value and purpose of scouting. In the evening a public lecture was arranged at the Edward Memorial High School which was preceded by displays of Bareilly scouts. The lecture produced a
good effect upon the audience and they went back filled
with enthusiasm and hopes of future about scouting. |
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